An Forecasting Platform Trader Profited $436,000 from Bets Predicting Maduro's Downfall.
An individual made nearly half a million dollars on the ouster of the Venezuelan leader immediately preceding it was made public, raising questions about the possibility of profiting from inside knowledge of the event.
Sudden Shift in Wagers
Predictions made on the forecasting site, a crypto-powered platform, that the leader would be no longer in control by the month's conclusion increased in the period preceding President Donald Trump announced on the weekend that the Venezuelan leader had been seized.
One account, which registered on the site in December and placed four wagers, all on the Venezuelan situation, profited a total of $436,000 from a starting bet of over $32,000.
Who placed the bet is a mystery. The anonymous account had only a blockchain identifier for identification.
Odds Fluctuate Before Announcement
Platform data shows that users assessed the probability of Maduro's exit at just 6.5% in the late afternoon of the Friday before the event.
Yet the odds had jumped to 11% by shortly before midnight and spiked dramatically in the early hours of the next day, indicating a sharp shift in positions immediately prior to the official statement was made.
"This particular bet has all the signs of a transaction based on confidential knowledge," said Dennis Kelleher.
Several of other traders also made large payouts from bets on the same outcome.
Regulatory Scrutiny Intensifies
Some lawmakers are growing concerned.
A new rule presented on recently seeks to ban federal workers from making trades on forecasting platforms if they have "material nonpublic information" related to a market.
Industry Context
Prediction markets have surged in popularity in recent years, with users able to bet on everything from elections to political events.
The industry faced scrutiny under the last presidential term. However it has experienced less resistance during the present political climate.
Using confidential knowledge is illegal in the stock market, but there are more ambiguous rules in the event betting industry.
A company executive for another major platform said their site "has clear rules against trading on insider information of any form."
